The Labour Court recently upheld a decision of an Adjudication Officer rejecting a worker's claim that he was discriminated against on the grounds of age when he was forced to retire at age 651.
In a useful case for employers, the Labour Court said that the respondent employer acted in compliance with Section 34(4) of the Employment Equality Acts 1998 – 2015 (the Acts) which allows the setting of a compulsory retirement age and that the retirement age it applied was proportionate, reasonable and necessary.
The claimant submitted that the decision to dismiss him amounted to age discrimination. He worked as a docker and said that he was in good physical health, capable of discharging his duties. Under the terms of the respondent's pension scheme he was due to retire at age 65. He engaged in correspondence with his employer seeking to work beyond this age. The claimant had no contract of employment and accordingly alleged there was no contractual retirement age. The claimant submitted that he had a legitimate expectation that he would remain working beyond 65 and that others employed by the respondent had done so.
The employer said it had a long established custom and practice of retiring staff at age 65. It also referred to the company pension scheme and said that this was concluded by way of collective bargaining with the trade union (which represented the claimant) and he was aware of its contents. It also submitted that the work of a docker was particularly arduous and accordingly the retirement age was proportionate and necessary in the circumstances. To support its argument it cited the Court of Justice of the European Union (the CJEU) decision of Rosenbladt which is authority for the proposition that it would be unreasonable to allow a person continue working until he/she is incapable of performing their duties. Fixing a retirement age for this class of worker is consistent with Section 34(4) of the Act and that it is proportionate and necessary as it facilitates the efficient planning of the departure and recruitment of staff. It also promotes a mix of generations of staff which in turn facilitates the exchange of ideas and a fresh approach.
The court found that the retirement age of 65 had been universally applied and that the employer had set out good grounds that objectively justified the selection of this age for this category of staff. The setting of the retirement age at 65 ensured that staff did not find themselves exposed to the potential embarrassment of finding themselves incapable of discharging their duties and being retired in that context rather than with dignity and respect. The court added the caveat that improving health and increasing longevity (together with the increase in state pension age) may mean that these ages may require review and upward adjustment. The court also found that the claimant had no legitimate expectation of working beyond 65 as he was at all times aware that he was a member of a pension scheme that required retirement at 65 unless that age was extended in "exceptional circumstances".
Takeaways Tips for employers in setting retirement ages:
Ensure that all contracts of employment specify a retirement age and engage in dialogue with employees in relation to the setting of this age;
Have an "objective justification" for this specific retirement age. The objective justification must be one which pursues a legitimate objective, such as labour market objectives and the means of achieving that aim must be proportionate and reasonable. Reasons which have been accepted by the courts in the past include succession planning, and the promotion of intergenerational fairness;
Reserve the right to vary and review the retirement age as the needs of the business evolve and develop; and
Where employers receive a request from an employee to work beyond their retirement date they need to carefully consider how they respond to this. The legislation does not prevent offering a worker past retirement age a fixed term contract. However this must be objectively justified. Such requests should be dealt with on a case by case basis with employers being mindful that the granting of such request creates precedent for other employees who may request such extensions and makes it more difficult for employers to endorse their normal retirement age.
1 EDA 1631
For more information please contact Sinead Grace or your usual contact in A&L Goodbody Solicitors.